5 Tips to Actually Make the Most of Your Travel Related Deductions
Travelling can get expensive quickly, but you can offset some of the cost by making the most of allowed deductions on your tax return. Business owners, and companies sending employees on travel can deduct expenses if they are considered ordinary and necessary, and are well documented. Be sure to discuss deductions with your tax advisor to ensure you’re adhering to the latest rules.
Digitize Receipts Right Away
Most of us know this one by now, but digitizing your receipts right away (or nightly) can make a world of difference in having your files organized come tax-time. Keeping up on the paperwork while you’re travelling will ensure you file all of the deductions you qualify for, and will save you a ton of time later on. Apps like Expensify, Shoeboxed and Dext are around. If your company uses a corporate card system, like Divvy, that can also be a great way to track. If you’re not into using an app, having a photo album for receipts or emailing them and tagging them are good alternatives.
Travel With Purpose
Business, Medical, Charitable, Educational and Moving travel can all be deductible. If you’re filing for deductions for any of these reasons, know that the majority of your trip needs to be dedicated to the designated purpose. Be cautious about your expenses if you’re combining personal vacation time on your trip. Only deduct expenses for travel days and days you’re actually participating in the primary purpose. A good general rule of thumb is to plan out at least four hours of work or volunteering per day you are planning to deduct travel expenses for business or charity.
Business travel can include meeting with a client or vendor to build connections or finalize a contract. In addition to these common travel purposes, you might also consider visiting properties your business owns to check up on them, or holding your annual Board, shareholder or member meeting somewhere fun.
For medical travel, there is the additional requirement that you need to travel away from home in order to get the treatment needed. Visiting a facility like the Mayo Clinic in Rochester Minnesota for special treatment may qualify.
Charitable Work Travel
A lesser utilized but valid and rewarding way to travel and deduct some expenses is to travel for charitable work. Deductible expenses can include transportation, lodging and meals just like business and medical travel. To qualify, you must be volunteering for a qualified charitable organization, and not receiving compensation for your services. If you’ve got special skills that you can use in your volunteering, that can be a great way to incorporate charity into your travels and have something fantastic to share with your clients on social media too.
Travelling for training and education to improve your skills for your current profession also qualify. Find those conferences, certification programs or other continuing education options in places that you would love to visit, and center your travels around those learning opportunities to deduct some of the expenses.
Deduct Your Communication Expenses
If you’re making phone calls or using the internet while travelling for business, you can deduct costs incurred to do so while you’re travelling. This can include Wi-Fi access fees, cell phone bills, and even faxing and printing fees. Save your phone battery and opt for Wi-Fi coverage where you can – including the hotel, at work locations, and even in vehicle as you get from place to place. Executive Transportation has added Wi-Fi services available when you’re travelling with us.
Deduct Other Miscellaneous Expenses
Smaller expenses can add up over time, and many of those are deductible too. Travel supplies like suitcases and other bags are tax deductible when used for business travel. So are the locks and tracking devices you buy to keep them secure. You’ll also want to keep track of your luggage fees, parking fees, and even the cost of laundry and dry cleaning. Tips to hotel staff, porters, baggage carriers and chauffeurs are also deductible as incidental expenses.
Deduct Your Actual Transportation Expenses at 100%
Your full transportation costs to your destination and between any business locations are deductible. That includes plane, train and even chauffeured services!
Executive Transportation regularly assists clients, from family vacations, to small business owners, to large international corporations with their travel needs. Our chauffeurs are based locally at each destination to provide you with knowledgeable service at every stop along the way. We even offer in-vehicle Wi-Fi services to keep you connected and productive on the road – a great option for teams and those who want to save their phone batteries for the rest of the day. Learn more about our business services today.